A major reform will see all Papua New Guinea’s state-owned telecommunications companies grouped under a single board for the first time. The Chairman of the new-look Kumul Telikom, Mahesh Patel, speaks exclusively to Business Advantage PNG about his board’s priorities for increased competition and ‘slashed’ internet prices.
Kumul Telikom Chairman, Mahesh Patel
PNG’s National Executive Council recently approved the merger of state-owned telecommunications companies, bmobile Vodafone (mobile) and PNG DataCo (infrastructure) under Telikom PNG, which will be renamed Kumul Telikom.
Kumul Telikom, which also owns IT services company Datec PNG and TV network EMTV, will remain a subsidiary of state-owned holding company, Kumul Consolidated Holdings.
‘The amalgamation allows for a cost-effective sharing of resources and market intelligence. It will allow us to realise cost savings and harness the synergies between the three telcos,’ noted Acting Minister for Public Enterprises Charles Abel back in February.
It will be hoped that the new-look telco will therefore be in a better condition to compete with the current market leader, Digicel PNG.
Affordable
Kumul Telikom’s Chairman, Mahesh Patel, tells Business Advantage PNG the ultimate goal is for the consumer to get affordable, low-cost internet.
‘That’s the bottom line,’ he says. ‘From my perspective as Chairman, it’s the customer first. If they’re not going to get the internet prices slashed, then, you know, what’s the point?’
Patel says once bmobile and DataCo are brought under the control of Kumul Telikom, the board will assess how best to use their assets and resources.
‘If they’re not going to get the internet prices slashed, then, you know, what’s the point?’
He says there will be a retail arm, which will provide fixed, mobile and content services, and a wholesale arm.
Funding
‘The board’s intention is to provide a one-stop shop for the consumer, but that will require a lot of planning before any decisions are made,’ says Patel.
Priorities will be a long-anticipated international undersea cable link and the continued rollout of 4G mobile phone network.
Funding of the telco’s development is an issue. Patel says Telikom and bmobile are EBITDA [Earnings before Interest, Tax, Depreciation and Amortisation]-positive’, but the problem is that government debts are ‘not allowing us to free up any cash’.
‘The restructure will not minimise competition, but actually strengthen competition.’
‘We’re looking at realigning our banking facilities now that we’ve got a firm structure. We have the capacity to borrow within our own means.
‘We have to ask ourselves how do we generate cash and, with whatever cash that is generated, where is the best use for that?
The merger is subject to review by PNG’s Independent Consumer and Competition Commission, a process Patel says Kumul Telikom will respect.
‘The restructure will not minimise competition,’ he asserts, ‘but actually strengthen competition—so that there is competition.’
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NEC decision 44/2017 approved Kumul Telikom to buy the net assets of B Mobile and Data co and the agreed consideration proceeds to be paid to Kumul Consolidated Holdings. This was decided to transfer debts from B Mobile and Data co to Kumul Telikom which is now cash positive given its 4g network. The Kumul Telikom Board did not implement this NEC decision but have hijacked this decision by transferring assets from Telikom to B Mobile and Data co, this is illegal because there was no legislation amendment to change Telikoms name to Kumul Telikom Holdings. What is proper to do now is to legislate the change of name from Telikom to Kumul Telikom Holdings and then KTH should pay off the net assets agreed consideration to KCH. This would guarantee job security for Telikom staff and ensure existing liabilities are guaranteed payment to bankers and creditors. There is also some issues on the directorship of these three entities. The same people are directors, chairmen and CEOs of these these companies which gives rise to conflict of interest situation. Before any major changes take over these Telco assets, these directorship issue has to be cleared. Most decent representation on these boards should come from churches, heads of gov’t depts or their nominees, heads of major corporate giants such as BSP, ANZ or Westpac or their nominees. The current practise of selection by the PM and the ministers is too much politicised and contributed to non performance of state owned assets. Telikom PNG Ltd is the country’ s national ICON communication company and this legacy is here to stay and live on for the future children of this country. It should not be politicised and diverted to private interests for selfish gain. This legacy national assets is non renewable and here to stay to provide employment and pay tax to the government. The government should protect such national assets rather than trying to divert such investments for private gain.